Tax forms for 1031 exchange


C

conyers_roger

I sold a residential income property and exchanged it with
another, higher priced, property (1031 Exchange). My
understanding is that I need to file two Schedule E's - for
the income properties sold and bought.

I'm somewhat confused as far as the like-kind exchange
related tax forms and schedules are concerned though.
Besides the 8824 form, do I need to submit a 4797 form?
Also, assuming a 4797 form is required, do I have to submit
a Schedule D?

Any response will be appreciated.
 
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T

Thomas Healy

conyers_roger@yahoo.com said:
I sold a residential income property and exchanged it with
another, higher priced, property (1031 Exchange). My
understanding is that I need to file two Schedule E's - for
the income properties sold and bought.

I'm somewhat confused as far as the like-kind exchange
related tax forms and schedules are concerned though.
Besides the 8824 form, do I need to submit a 4797 form?
Also, assuming a 4797 form is required, do I have to submit
a Schedule D?
You can actually use 2 columns on one Schedule E <grin> -
saves paper. You'll only need a 4797 or Schedule D if you
have a taxable gain in the transaction (i.e., if you do it
right, no). You'll need a Form 4562 to report the new
depreciation. Remember that there will be double entries for
each asset: a carryover land basis plus new money land
basis; carryover building basis plus net building basis,
etc. The old basis continues with the same method used
previously (unless the new property is 39-year instead of
27.5-year). You'll also likely have a different basis for
each asset for AMT purposes.
 

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